Master Data Management in Manufacturing

Jose Almeida
4 min readMar 4, 2022
Master Data Management in Manufacturing

The manufacturing industry is exposed to severe global competitions and its business environment is changing rapidly. The industry is now required to adapt itself to this change.

The industry has long been reliant on lean manufacturing models to achieve profitability. From just-in-time manufacturing concepts to continuous improvement or quality initiatives, driven by the need to increase and refine operating efficiencies.

It’s time to pursue these same objectives through data.

Most organizations in manufacturing have ongoing digital transformation processes, and those that are not, have them planned, or should.

The growth of demand, and more competitive markets are compelling manufacturers, from every area in the industry — apparel, appliances, food, furniture, electronics, machinery — to adopt innovative business models, outsourced production, transforming core and non-core functions, reducing supply chain complexity, and even to develop capabilities to reach customers directly, providing more personalized and relevant products as cost and time-to-market pressures increase.

As in other industries, Master Data Management is a critical foundation for manufacturers to succeed in the digital economy –integrating multiple systems to deliver accurate, timely data across these organizations — to achieve their business objectives, improving time to market, operational efficiencies, and providing better customer experiences.

In a time where we witness consumers adopting, new, short-term behaviours that will to a certain degree become permanent as we emerge to a new economic reality.

Whoever wants to thrive in a now more competitive and volatile environment needs to adapt their organizations into fast decision processes, increase their supply chain resilience, integrate multiple channels into a single and improved customer experience and to adapt and foresee their, suppliers and distributors and customers’ needs and behaviours.

Master data is the critical driver that enables organization to exploit the vast amounts of data they gather in an efficient way.

Master data is the heart of the most valuable information that an organization owns, helping every line of business to deliver value.

What is Master Data?

Master data is usually defined as the set of core entities within an organization, depending on the industry it may include customers, prospects, suppliers, sites, hierarchies etc.

The purpose of managing this data is to assure a consistent definition of these business entities and data about them across the organization’s multiple systems, establishing a standard definition for business-critical data that represents a single source of truth.

What is Manufacturing Master Data?

When looking at a manufacturer, besides the examples mentioned above as customers, suppliers, etc, a few examples of more industry specific master data entities are components, materials, ingredients, retailers, vendors, partners, distributors, locations or reference data.

Master data management should cover the process of collecting the data for each of these domains and provide it to all relevant systems and stakeholders.

What are the benefits?

Master data management provides various benefits to the efficiency and success of a manufacturer, either directly or as a support component for many of the digital transformation initiatives, enabling the capability to:

· Base decisions on a consolidated and consistent enterprise level view of all the critical entities

· Deliver consistent, quality data across the organization, from supplier to point of sale.

· Reduce risk of data discrepancies between different data silos, channels (internal or external)

· Create a single, central repository for gathering and integrating data across the entire value chain

· Ensure data consistency

· Reduce time to market by effectively managing information as it flows across the organization and external channels.

· Establish a unified view of process and data

· Achieve a clearer knowledge of the full value chain

· Ensuring traceability for all core business data, across all channels

It’s important to keep in mind that this value can only be delivered once the master data is consumed by everyone in the organization, meaning that there are costs associated with the integration with other systems (Core, CRM, BPM, Portals, etc.) that must be considered to achieve these benefits.

There is no single approach to starting an MDM project

Master Data Management plays an important role in this solution and a pivotal role in the organizations’ ambitions in a competitive marketplace.

When organizations aim at being data-driven master data must be the primary focus.

Master data is the most valuable data that an organization owns, used across all the organizations’ units, processes, and systems to keep the organization working.

Even within the same organization we can find different approaches on how data is handled, this will lead to different levels of maturity, different approaches on how and what data is collected and used.

A good rule of thumb is to start with a business area where we can identify clearly business value to be generated (grounded on business cases) and that has the best conditions to work as a seed for master data. Maximizing the chances for a success story.

This success story demonstrates the value generated, acting as a powerful driver for the incremental integration of other business areas and systems.

A master data management initiative can’t be a stand-alone initiative.

It is a disruptive process, and its success relies heavily on a strong executive sponsorship and on data governance policies and processes.

It’s critical to have an incremental, focused approach, choosing a business case that can bring visibility to the initiative within a reasonable timeframe and budget, to get the stakeholders buy-in and organizational awareness.

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Jose Almeida

Data Consulting and Advisory MEA - Driving better insights through better data (www.josealmeidadc.com)